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Autumn Budget 2017

When Chancellor Philip Hammond stepped up to the despatch box, he would have been acutely aware of the pressure he was under.

Some 24 hours before the Chancellor was due to open his famous red box, the Office for National Statistics (ONS) confirmed a wider deficit than anticipated for October.

Ahead of the Budget, business leaders had urged Mr Hammond to get to grips with Brexit headwinds and the UK’s productivity problem, while his party’s own MPs were demanding action on issues such as housing and social care – which many believed had played a major part in the shock loss of the Government’s majority in June.

There was personal pressure too. Some eight months ago, the Chancellor’s previous Budget unravelled at alarming speed (unpopular plans to increase National Insurance contributions for some self-employed workers were dropped within seven days). He could ill afford another flagship policy disintegrating.

All things considered, Mr Hammond had the difficult task of delivering a financial statement which was both radical enough to reset the political agenda and robust enough to avoid a repeat of the spring’s hasty u-turn. Could the Chancellor – whose fondness for figures has earned him the nickname “Spreadsheet Phil” – deliver?

Economic overview:

Opening his address to MPs, Mr Hammond argued that the UK economy continues to “confound those who talk it down” and said that he was determined to invest in technological advances and seize the opportunities on offer.

He acknowledged that ongoing negotiations with the EU were at a crucial stage and with this in mind he would put aside an additional £3billion for Brexit preparations over the course of the next two years. He assured the House that the Treasury was drawing up plans for every possible outcome.

Outlining forecasts by the Office for Budget Responsibility (OBR), Mr Hammond said that the organisation was predicting that another 600,000 people would be in work by the 2020s.

Worryingly, the nation’s productivity has not improved and the predictions for growth have been cut substantially. The OBR now projects growth of 1.5 per cent this year (downgraded from two per cent in March). The forecast for next year is 1.4 per cent, and 1.3 per cent for both 2019 and 2020.

There was better news on borrowing, with Mr Hammond confirming that the forecast for this year is £49.9billion (£8.4billion less than had been projected in the spring).

And as regards the deficit, he said that the OBR figures suggested that the Government was on track to meet its target of reducing the deficit to below two per cent of GDP by 2020-21.

Business and enterprise:

Ahead of the speech there had been no small amount of speculation that the VAT threshold for businesses was to be lowered.

But the Chancellor confirmed that the registration threshold will in fact remain at its current level (£85,000) for the next two years, shying away from a contentious change.

Mr Hammond did hint that he would be considering some form of reform and said he would hold a consultation as to whether the system could be altered to “better incentivise growth”.

In relation to business rates, Mr Hammond said he had listened to concerns from business leaders. With this in mind, he has decided to bring forward the switch from the Retail Price Index (RPI) to the Consumer Prices Index (CPI) by two years. The change will now take effect in April 2018 and is expected to be worth £2.3billion to businesses over the next five years. In addition, the discount for pubs (rateable value less than £100,000) is to be extended to March 2019.

In another boost for businesses, Mr Hammond announced that he would be allocating an additional £2.3billion for investment in research and development (R&D). The main R&D tax credit will be increased to 12 per cent.

These measures were described as “the first strides towards the ambition of our industrial strategy to drive up R&D investment across the economy to 2.4 per cent of GDP.”

Amid uncertainty over the impact of Brexit, the Chancellor also confirmed that the Government would be prepared to replace money from the European Investment Fund if necessary.

Transport and infrastructure:

Mr Hammond said the Government was committed to supporting electric vehicles. Among the measures announced by the Chancellor were a £400million charging infrastructure fund.

As far as diesel cars were concerned, the Chancellor confirmed that vehicle excise duty for new vehicles that don’t meet the latest standards will increase from April 2018. The money raised will be invested in a £220million clean air fund.

£30million will be made available to enhance digital connectivity on the trans-Pennine route and councils will be able to stake a claim to £1billion for high-investment projects.

A new rail card for commuters aged 26 to 30 will enable around 4.5million travellers to get a third off rail fares.

Personal tax:

To cheers from his own benches, Mr Hammond confirmed that Stamp Duty would immediately be abolished for first-time buyers for homes worth up to £300,000 (and on the first £300,000 of properties up to £500,000). There are hopes this will stimulate a slowing property market.

There was good news for the majority of air passengers, with the announcement that from April there would be a freeze on short-haul air passenger duty and long-haul duty for those in economy. The measures will be funded by increasing taxes on private jets.

The threshold for the basic rate of income tax will rise to £11,850 in April 2018, with the higher rate threshold to climb to £46,350.

An increase to the National Living Wage, set to take effect in April, was also confirmed. It will rise from £7.50 an hour to £7.83.

Duties on beer, wine, cider and spirits will be frozen, although tobacco tax will continue to rise at inflation plus two per cent.

Public spending:

More money is to be made available to the devolved administrations (£2billion for Scotland, £1.2billion for Wales and £650million for Northern Ireland). As had been trailed beforehand it was confirmed that both Police Scotland and the Scottish Fire Service would be made exempt from VAT going forward.

Facing increasing demands to address the growing strain on the health service, Mr Hammond outlined plans for an extra £10billion in capital investment over the course of this Parliament. There was also a commitment to make additional money available to improve pay levels for NHS workers.


The introduction of Universal Credit has come in for considerable criticism in recent weeks, with many opposition politicians urging the Government to pause roll-out of the changes.

Mr Hammond acknowledged that many Britons were facing a squeeze on their finances and, in an effort to address the controversy, confirmed that £1.5billion would be spent on efforts to make the system more generous.


The Stamp Duty announcement has stolen the headlines, but the Chancellor announced a number of measures apparently designed to show he was taking problems facing the property market seriously.

The Chancellor admitted that young people were concerned about their prospects. While he said there was no “magic bullet” to fixing some of the problems, Mr Hammond gave a commitment that £44billion would be made available over the next five years to address some of the major problems.

It was also announced that councils will be given powers to charge a 100 per cent premium on council tax on empty properties. This is something which a number of local authorities have been lobbying for.

Tax evasion, avoidance and aggressive tax planning:

Hard on the heels of the Paradise Papers controversy, the Chancellor said that HM Revenue & Customs (HMRC) would redouble its efforts to tackle offshore tax avoidance. This strategy is calculated to raise £200million a year.


Ahead of any Budget, the media often speculate about whether the Chancellor will pull “a rabbit from the hat”; announcing an audacious policy decided to win favour with voters. The Stamp Duty changes certainly fit the bill and are likely to dominate the headlines in the days ahead.

As far as businesses are concerned, there will no doubt be relief that the changes to the VAT threshold which had been rumoured in advance of the speech failed to materialise.

Critics may say that the Budget otherwise erred on the side of caution, with an emphasis on prudence over particularly radical announcements.

And the Treasury will no doubt be mindful that the OBR forecasts, which suggest the economy is rather weaker than was thought back in March, could mean that challenging times lie ahead.

View official documents and full Statement

Accountants get in touch with their artistic side for team building

Art ProjectOne of Buckinghamshire’s leading firms of accountants The Fish Partnership has swapped calculators for paint brushes as part of a team building exercise with a local artist.

Nearly 30 of the firm’s team had a go at creating collaborative artwork with Sally Webb of Connect2Colour using the practices brand colours.

The artworks on canvas were based around words that reflect the firm’s values, objectives and behaviours, such as ‘pro-active’, ‘friendly’ and ‘professional’.

These works will now be hung around The Fish Partnership’s offices in Boundary Road, Loudwater for guests to enjoy and to get the team to think and reflect on their approach to providing services.

Christopher Nisbet, a Director at The Fish Partnership, said: “Everyone had lots of fun creating these masterpieces for the office, but they also helped us to think more about how we as a firm operate and the level of service our clients expect.

“We are definitely a stronger team as the result of this activity and I would like to thank Sally for helping us to create these fantastic pieces.”

Leading local accountant completes prestigious qualification

team-denise-cookDenise Eyles, a Director at one of High Wycombe’s leading accountancy firms, The Fish Partnership, has passed her CTA (Chartered Tax Adviser) qualification.

Accredited by the Chartered Institute of Tax, the CTA is considered the pinnacle of the tax profession and marks Denise out as a provider of high quality tax advice.

In order to pass the tough qualification Denise was required to complete a number of difficult examinations to prove she had the necessary knowledge and skills.

Speaking after receiving her results, Denise said: “I am really pleased to have obtained my CTA. This is a notoriously hard qualification, which is reflected in the limited numbers of people that pass it each year.

“I hope having obtained this accreditation that I am able to extend my existing tax planning expertise to a wider audience, while continuing to support our clients.”

Denise is the Tax Director with final responsibility for all of the tax work performed at Fish Partnership and has spent the last decade and a half supporting her colleagues at the firm with a wide variety of complex issues.

Martin Sheehy, Managing Director at The Fish Partnership, added: “I would like to congratulate Denise on her completion of the CTA qualification – one of the toughest set of examinations in the profession. “

HMRC launches digital tax pilots

In a bid to calm fears about the introduction of Making Tax Digital (MTD), HM Revenue & Customs (HMRC) is to invite selected businesses and agents to take part in a pilot programme to report their income and expenses as part of the MTD strategy.

A report from the Treasury Committee in response to the proposed introduction of MTD called for more detailed testing of the implementation of digital tax services, citing what it called “insufficient engagement” with businesses that will have to rely on them.

HMRC will therefore seek user feedback to try and inform development of the new functions, such as in using accounting software to record the business’s income and expenses. They will also ask the participating firms to provide summary reports of income and expenses on a quarterly or more frequent basis, as well as switching to paperless working, with HMRC providing an estimated tax calculation.

According to a statement by HMRC, once the new services have been tested with the first group of businesses and agents, other customers will be able to join the pilot. These customers will be able to report their income and expenses for the quarter they join, as well as any previous quarters.

Although customers that are not invited to participate in the pilots will be unable to send quarterly reports to HMRC initially, options are available to start making use of accounting software to maintain their records.

Earlier this year, HMRC committed to piloting new digital systems designed to overhaul tax reporting for hundreds of thousands of businesses and providing free software to smaller companies in response to an eight-month consultation on its plans.

There will also be a number of additional commitments for businesses under MTD, including more extensive reviews, before introducing a mandatory requirement for businesses to switch to electronic record management.

Fines of up to £3,000 for failure to comply with Making Tax Digital, says HMRC

Taxpayers who fail to use Making Tax Digital, the Government’s all-new digital tax system, will face fines of up to £3,000, according to a consultation paper released today.

Making Tax Digital will see the end of the paper tax return and force the majority of taxpayers to file quarterly digital tax reports.

In the new consultation paper, HM Revenue & Customs (HMRC) said deliberate failure to keep digital records may result in fines of up to £3,000.

Fines for late submissions were not specified, which may mean that they will follow the current penalty charge of £100.

However, where fines are automatically charged under current rules, fines for Making Tax Digital will operate under one of three suggested schemes.

Under option 1, a tiered points-based system, taxpayers will receive points for non-compliance, which will result in a fine once a penalty threshold has been met.

The number of points given will be determined by the severity of the error.

HMRC adds that long periods of “good behaviour” will result in points being wiped from a taxpayer’s account.

It said firms will also be given a 12-month period where they can adjust to the new system and not be fined for late submissions.

Under option 2, HMRC will conduct an annual review of compliance – an automated yearly review of taxpayers’ submissions.

HMRC proposes ‘that for customers who provide an annual submission (for example, an annual VAT return or income tax self-assessment return) the review would be carried out within two months of the deadline for providing the submission’.

It adds that taxpayers would be contacted once a missed submission was identified and that they would be given the opportunity to remedy their tax affairs.

The third and final option, suspended penalties, would see fines only charged if a taxpayer fails to submit a late return within a specified period of time.

The consultation states that suspension could be applied on more than one occasion, but ‘it is not the Government’s intention to encourage taxpayers to establish a pattern of repeatedly providing submissions late, so the number of occasions on which a penalty would be suspended would need to be limited’.

The consultation paper, ‘Making Tax Digital: sanctions for late submission and late payment’, is available here.

One-year delay to MTD for small businesses ‘not enough’

Chancellor Philip Hammond announced in the recent Budget that plans to digitise tax returns for small businesses have been delayed until April 2019 but critics claim this is not enough to prevent the measures being a burden to entrepreneurs.

The Government’s Making Tax Digital (MTD) roll out was meant to start in April next year but following the announcement, sole traders, the self-employed and buy-to-let landlords with an income of less than the current VAT threshold (£85,000 from 1 April 2017) will have an extra year before they must start reporting on a quarterly basis.

It is believed that the delay will cost the Treasury around £280m in lost revenues, as its success is predicated on a reduction in the number of errors and intentional mistakes made in tax returns.

However, the Association of Tax Technicians (ATT) is calling the announcement merely a “gesture” and says it is not enough to prevent the requirements of the scheme, such as digital record keeping and quarterly updates from “burdening entrepreneurs”. While the Association acknowledges that the delay will allow a little more time for such businesses to find a digital solution, they claim it will still be “overly burdensome”.

When HM Revenue & Customs (HMRC) issued consultation documents on MTD there was a general call for the start to be delayed so that business owners could select the best reporting solution for their individual requirements.

Like most other commentators, the ATT accept that a digital interface between HMRC and taxpayers is the best solution but are concerned at the cost of compliance, particularly since HMRC still has not responded to requests to publish the details of what the cost might be for small firms, so no one knows whether their estimates are accurate.

Spring Budget 2017

Various rumours were swirling around Westminster in the days before Philip Hammond rose to deliver his first Budget – confirmed as the last time a major fiscal statement will be made in the spring.

The Chancellor, still scarcely nine months in the job, has a reputation as a cautious man and in advance many expected that much of today’s speech would be laying the ground for the Prime Minister to begin formal negotiations for the UK to leave the EU.

That said, the day before Mr Hammond stood up to address the Commons, the Organisation for Economic Co-operation and Development (OECD) upgraded Britain’s growth forecast, which inevitably raised questions about whether there was yet room for manoeuvre.

Would the Government prove willing to make money available to shore up struggling services or answer the growing criticism over business rates reforms? Would it be tax rises or surprise giveaways bothering the headline writers?

Economic overview

In his opening statement, the Chancellor said that the resilience of the UK economy had continued to defy expectations and the country had enjoyed robust growth. Indeed, he noted that last year Britain’s growth was behind only Germany’s among the world’s biggest economies.

Mr Hammond confirmed that the Office for Budget Responsibility (OBR) had raised its growth forecasts for the year, with the economy now projected to grow by 2 per cent in 2017, compared with the previous estimate of 1.4 per cent. The independent body suggests growth next year will be 1.6 per cent and in 2019, 1.7 per cent.

But he made clear that there was no place for complacency in the current climate, acknowledging that levels of debt were still too high (peaking at 88.8 per cent next year), productivity needs to be improved and many families up and down the country continued to feel the pinch almost a decade on from the financial crash.

OBR figures also suggest that inflation will peak at 2.4 per cent this year, with expectations that it will drop off as we approach the end of the decade.

Trying to strike a balance between prudence and positivity, the Chancellor told MPs that the Budget presented an opportunity to put money into public services while ensuring that the nation continued to live within its means. Crucially, he said, the tax and spending plans would form the bedrock of the EU negotiations ahead.

Business and enterprise

Following several weeks of sustained criticism over the burden that business rates changes would place on many enterprises, Mr Hammond announced a three-point plan which he said would amount to an additional £435million support.

Any firm losing existing rate relief will be guaranteed that their bill will not rise by more than £50 a month next year. In addition, there will be a £1,000 discount for pubs with a rateable value of less than £100,000 and the creation of a £300million fund which will enable local authorities to offer discretional relief.

The Chancellor made clear that a fair tax system was one of the best ways to make Britain a top destination for businesses. He reiterated the commitment made by his predecessor, George Osborne, to bring the Corporation Tax rate down to 17 per cent by 2020. A reduction to 19 per cent will take effect from next month.

Following concerns about the current timetable, he confirmed that quarterly reporting would be delayed for small businesses for a year (at a cost of £280million).

Transport and infrastructure

Acknowledging that congestion was an issue in large parts of the country, Mr Hammond said that some £690million would be made available to tackle traffic problems in urban areas and get local networks moving more freely.

The Chancellor also announced a £270million investment to keep Britain at the forefront of research into biotechnology, robotic systems and driverless cars.

An additional £200million will be ploughed into projects to help secure private sector investment in full-fibre broadband networks and £16million put aside for a 5G mobile technology hub.

Personal tax

Controversially, it was revealed that National Insurance contributions will rise for the self-employed.

Under proposals, Class 4 NICs will increase from 9 per cent to 10 per cent next April and to 11 per cent in 2019.

Trying to defend what will undoubtedly be a contentious move, the Chancellor said that the “unfair discrepancy” in contributions between different groups of workers could no longer be justified. Critics have suggested the move has broken with a commitment in the 2015 manifesto.

In more positive news, the personal allowance will rise to £11,500 – the seventh consecutive increase.

The Chancellor reiterated the Government’s previous commitment to increase the allowance to £12,500 and the higher rate threshold to £50,000 by the end of the Parliament in 2020.

There was a boost for road users with confirmation that vehicle excise duty for hauliers and the HGV road user levy will both be frozen.

The Chancellor also announced there would be no change to the previous planned duties on alcohol and tobacco. There will, however, be a new minimum excise duty on cigarettes based on a £7.35 packet price.

Pensions and savings

In what is likely to be an unpopular move, Mr Hammond confirmed that the tax-free dividend allowance for shareholders would be cut from £5,000 to £2,000 as of April 2018.

The Treasury said that the change would “ensure that support for investors is more effectively targeted”, but critics fear it will further hurt entrepreneurs.

Public spending

Mr Hammond had faced some pressure from his own MPs to plough more revenue into public services.

In an attempt to address criticism that institutions were buckling beneath the strain, the Chancellor confirmed an extra £260million for improving school buildings and funding for an additional 110 free schools (on top of the 500 previously announced). There has been some controversy, however, that some of these are set to be selective.

In an attempt to address the mounting crisis in social care, Mr Hammond announced there would be an extra £2billion in funding over the course of the next three years.  A Green Paper will be published later this year with a view to drawing up a long-term funding plan.

Tax evasion, avoidance and aggressive tax planning

The Chancellor said that a fair tax system required people to pay their dues and a series of measures to curb abuses of the system are expected to raise an additional £820million for the Treasury.

A raft of measures to tackle non-compliance were announced, including preventing businesses converting capital losses into trading losses, curbing abuse of foreign pension schemes, introducing UK VAT on roaming telecoms services and imposing new financial penalties for professionals who help facilitate a tax avoidance arrangement that is later defeated by HM Revenue & Customs.


In his closing remarks, Mr Hammond struck an optimistic tone. Whatever the uncertainties surrounding Brexit, he told MPs that the UK should be confident that our best days lie ahead of us.

It would be fair to say that the Budget was not strewn with giveaways, but the Chancellor did try and take the sting out of some of the main criticisms levelled at the Government in recent months – including its handling of business rates reform and the sluggish response to a mounting care crisis.

That said he is also likely to have stirred up fresh controversies and the decision to increase National Insurance for the self-employed is perhaps evidence that in the current climate tough choices will still have to be made.

View official documents and full Statement

Only six per cent of self-employed business owners are aware of Making Tax Digital

A new survey of self-employed workers and business owners suggests that only six per cent are aware of the Government’s imminent Making Tax Digital (MTD) project – which will make quarterly digital reporting mandatory for the majority of businesses.

This lack of awareness comes despite the fact that the project, which HM Revenue & Customs (HMRC) has said will see the end of the traditional tax return as we know it, will force self-employed individuals to be among the first to adapt to an ‘all-digital’ tax system from next year.

Under current proposals, the Revenue will roll out MTD for landlords and the self-employed in April 2018, shortly followed by small and medium-sized enterprises (SMEs) and larger companies.

Many sole traders, small businesses and self-employed individuals are expected to need to completely change the way that they keep financial records in order to comply with HMRC’s tax systems overhaul.

Yet a recent study carried out by 1Tap Receipts suggests that as many as 94 per cent of self-employed business owners have never even heard of MTD – highlighting the need to seek advice sooner rather than later to ensure a smooth transition to the new tax system.

The same survey found that more than half (55 per cent) of self-employed workers dislike the current self-assessment process – suggesting that, for some self-employed business owners, the shift to MTD may be welcomed as a positive change.

50-page report calls upon Government to delay Making Tax Digital

HM Revenue & Customs (HMRC) has decided that all tax systems in the UK will need to be 100% digital by 2020.

The news comes as part of a £1.3billion project dubbed ‘Making Tax Digital (MTD)’ which, simply put, is the most significant change to tax filing made by the Government in a generation.

All businesses and self-employed taxpayers with an annual turnover of £10,000 or more are required to register, file, pay, and update their information online under MTD proposals.

Fortunately, The Fish Partnership are here to help.

Digital Tax Accounts: How can we help?

For most, Making Tax Digital (MTD) is compulsory, and The Fish Partnership understand that busy British businesses and self-employed taxpayers will want to go digital, quickly, easily and with minimum hassle.

HMRC has promised to make the changeover to online tax accounts as smooth as possible, but The Fish Partnership believe that it is important to be one step ahead of the game, and not get left behind.

Which is why we are inviting you to sign up to our online accounting solutions – the perfect answer to the MTD situation.

By signing up today, you can set up an online account, and enjoy the benefits of quickly and effectively managing your finances on the move, as and when it suits you.

Better still, our specialist tax advisers will be on hand, should any issues, queries or tax uncertainties arise.

For more information about our online accounting solutions, please click here.

Government will respond to Making Tax Digital consultations in January 2017

Chancellor Philip Hammond has been widely criticised for failing to shed any further light on Making Tax Digital (MTD) during his Autumn Statement announcements. But a closer look at the documents made public on 23 November reveals that the Government has committed itself to publishing its response to MTD consultations in January 2017.

The MTD initiative was first announced in December 2015, with limited information made public until six consultation documents and one overview document were issued in August this year. These consultations closed on 7 November, attracting wide-ranging responses and criticism from the tax and business world.

Many have suggested that the Chancellor missed a beat in his failure to address MTD at the Autumn Statement following the consultation feedback – particularly in the wake of calls to delay the project, which were backed by the likes of the Federation of Small Businesses (FSB) and the Association of Taxation Technicians (ATT).

Small and medium-sized enterprises (SMEs) and taxpayers alike have long awaited clarity and certainty about MTD, but unfortunately, all have no choice but to continue to play the waiting game until January 2017.